A home equity line of credit (HELOC) lets homeowners borrow against their property’s value. During the draw period you may make interest-only payments as you tap funds for repairs, tuition, or other expenses. Eventually you must repay the principal, so it’s wise to see what that payment might look like before borrowing. This calculator estimates the monthly amount based on how much you plan to draw, the annual interest rate, and the number of months you’ll take to repay that draw. Knowing the figures ahead of time can help you budget wisely and avoid surprises once the repayment period begins.
The monthly payment uses the familiar amortizing loan formula. In MathML, the equation is:
where is the draw amount, is the annual rate as a decimal, and is the number of months. The formula assumes fixed payments over the repayment term. Many lenders offer interest-only payments during the draw period; this tool focuses on the later repayment stage when you start to pay down principal.
HELOCs can provide flexibility, but they also create new debt secured by your home. Evaluating the monthly payment before drawing funds clarifies how the balance fits with your long-term budget. A large draw repaid over a short term increases payments significantly. In contrast, a smaller draw or longer repayment period can keep the monthly amount manageable. Consider how the payment interacts with other obligations such as your mortgage, property taxes, and insurance. If interest rates fluctuate, revisit this tool to see how a higher or lower rate would affect the payment.
| Draw | Rate | Months | Payment |
|---|---|---|---|
| $10,000 | 6% | 60 | $193 |
| $15,000 | 5% | 72 | $243 |
| $20,000 | 7% | 84 | $309 |
The payment values above are approximate to illustrate how varying the draw amount, interest rate, or term can change your monthly obligation. Always confirm specific loan details with your lender. This calculator serves as a planning aid so you can make informed decisions about tapping your home equity.
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